Gemini Electronics Case AnalysisUse the Excel spreadsheet provided to conduct a financial analysis of Gemini Electronics. Use thisanalysis to inform your decisions about the company. Assuming the role of Sarah McIvor, CA, prepare a2-3 page memorandum that analyzes the financial condition of Gemini Electronics and makesrecommendations relating to the company’s desired expansion. The memo should be divided intosections describing: Liquidity – Use the current and cash ratios to evaluate Gemini’s ability to cover their short-termliabilities (up to 12 months). As compared to industry averages, what do these ratios tell youabout Gemini’s financial position and how might that influence its expansion capability? Asset management – Consider the various inventory ratios, A/R and A/P ratios, cash conversioncycle, and asset turnover. Do these support Gemini’s desire to expand? If so, how? If not, whynot? Long-term debt paying ability – Examine Gemini’s debt and long-term debt to total capitalizationratios. What do these tell about Gemini’s use of debt vs. equity to fuel its growth and its abilityto be sustainable going forward? Also consider Gemini’s TIE and cash flow coverage ratios. Howdo all these ratios impact Gemini’s expansion potential? Profitability – Use the three profit margin ratios and items in the horizontal and vertical incomestatement and balance sheet to evaluate Gemini’s performance. Look also at ROA and ROE ascompared to industry averages. Recommendations regarding Gemini’s growth potentialo What recommendations do you have for Gemini related to expanding product lines?o What recommendations do you have regarding their distribution in the USA and outsidethe USA?o What recommendations do you have regarding use of capital (R&D, marketing, reducingdays to pay A/P, potential acquisitions, etc.) and sources of capital (debt vs. equity)?A few online resources to help you calculate and understand these ratios are found below. There areother online resources, as well, but these are a good start. https://www.investopedia.com/terms/r/ratioanalysis.asp https://www.accountingcoach.com/financial-ratios/outline https://corporatefinanceinstitute.com/assets/financial-ratios-definitive-guide.pdfImportant note regarding industry average ROA.The industry average ROA in the Excel spreadsheet is correct. The industry average on page 7 of yourcase study is a typo.The main objective of the case analysis is the decision regarding growth. However, that decision is highlyinfluenced by the company’s financial performance and the story (information) that the data tells.New due date: Thursday, Dec. 7 by 5:00 p.m.
You will be graded on the following: Accuracy of your financial calculations (ratios, analysis) – 25% Accurate analysis of liquidity, asset management, debt repayment, and profitability – 30% Appropriateness of and support for your recommendations – 30% Spelling and grammar – 15%Do your own work. Do NOT use ChatGPT or any other AI tools for your calculations, analysis, orrecommendations. Doing so will result in a grade of 0 for the Case Study Analysis section of this courseand likely failure in the course